1. BBB Ltd., issued a 20 year zero coupon bond on 1 July 2016. It is...
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1. BBB Ltd., issued a 20 year zero coupon bond on 1 July 2016. It is now 1 July 2020. The current yield to maturity for the bond is 5% p.a. a. What is the price per $100 for this bond today? (2 marks) b. If, over the next 12 months market rates for this type of bond were to recover to 4% p.a. what rate of return would an investor who purchased the bond today have earned if they sold the bond on 1 July 2021? (3 marks) 1. BBB Ltd., issued a 20 year zero coupon bond on 1 July 2016. It is now 1 July 2020. The current yield to maturity for the bond is 5% p.a. a. What is the price per $100 for this bond today? (2 marks) b. If, over the next 12 months market rates for this type of bond were to recover to 4% p.a. what rate of return would an investor who purchased the bond today have earned if they sold the bond on 1 July 2021? (3 marks)
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a Given Zero coupon bond issued on 1 July 2016 Date is now 1 July 2020 Time remaining to ... View the full answer
Related Book For
Fundamentals Of Investments Valuation And Management
ISBN: 9781266824012
10th Edition
Authors: Bradford Jordan, Thomas Miller, Steve Dolvin
Posted Date:
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